July 05, 2007
Microsoft to take $1 billion Charge to Fix Xbox 360s
Microsoft announced today it's going to take a $1.05 billion to $1.15 billion charge due to an "unacceptable" number of Xbox 360s breaking down. We heard a major retailer days ago say the defect rate has been 33%, which is an insanely high incidence of red rings of death.
If you figure it costs about $333 to send out a new Xbox 360 for each defect, a 30% defect rate out of the 10 million sold would match the $1 billion charge number. That is crazy. Meanwhile the PS3 reportedly only has a 1% defect rate, however there aren't any good games to play on it. [Discuss]
